Molasses shortage treated as handling loss, so remission failed without cogent proof of eligible storage loss.

Shortage of molasses in storage was claimed as a condonable storage loss eligible for remission of duty under a Board circular allowing condonation up to 2% of production. The contemporaneous intimation, however, described the loss as a handling loss, and the circular did not extend to handling losses. Remission for handling loss required independent proof through cogent evidence, but no such evidence or convincing explanation was produced. The shortage was therefore not established as a storage loss, and remission remained rejected.

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Issues: Whether shortage of molasses in the storage tank was a condonable storage loss entitled to remission of duty, or a handling loss requiring proof before remission could be granted.

Analysis: The claim for remission was founded on the contention that the shortfall of molasses was a storage loss within the limit covered by the Board's circular permitting condonation up to 2% of total production. However, the contemporaneous intimation to the department described the shortage as handling loss, not storage loss. The circular did not extend to handling losses, and such loss had to be independently established with cogent evidence before remission could be allowed. No evidence or convincing explanation was produced to prove handling loss.

Conclusion: The shortage was not proved to be a storage loss, and the rejection of remission was upheld.

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